You may see it as Hong Kong's second return to China or the betrayal of the principles behind the city's handover from the United Kingdom in 1997, a killing of the goose that laid the golden eggs or the end of Hong Kong altogether. Whatever expression you choose, after decades of holding Hong Kong gingerly in its palm, China finally closed its fist on July 1 with a new security law that threatens what little remains of Hong Kong's raison d'être as an offshore financial center. The whole point of Hong Kong is to be a place where people can do business in China without being subject to Chinese law. The security law brings Hong Kong into the cold. That may make Beijing more confident in its ability to impose its will on the territory and its people, but it makes Hong Kongers themselves more vulnerable—and their city less viable.
Thus it comes as no surprise that record numbers are heading for the door—or at least making preparations to do so. Even before the new security law was proposed, more than 40 percent of Hong Kong's population was considering emigration. Highly skilled expatriates were also reportedly leaving Hong Kong in the wake of massive protests and the coronavirus epidemic. A June membership survey by the American Chamber of Commerce in Hong Kong revealed that the national security law was likely to drive even more foreign residents—and their companies—out of the jurisdiction. While some express a healthy skepticism that these intentions will ever be realized, the overall mood is certainly not bullish on Hong Kong.
If Hong Kongers want to leave, those with the highest skills will find doors wide open for them all around the world. To begin with, all Hong Kong natives who are over 23 years old—and were thus British subjects on the day the former colony was handed over to China on June 30, 1997—are automatically eligible for British National (Overseas) passports. These have not historically conferred residency rights in Britain, but U.K. Prime Minister Boris Johnson has now offered these passport holders and their dependents the right to live, work, and study in the United Kingdom as well as a six-year pathway to citizenship. That offer alone could cover more than half of the current population of Hong Kong.
Several hundred thousand Hong Kongers also hold Canadian or Australian citizenship or permanent residency rights. Both countries are considering measures to make it easier for more to make the move, with Canada cryptically reviewing options and Australia considering a special protection visa scheme. Closer to Hong Kong, Japan is actively pitching for financial firms to relocate to Tokyo while considering an expedited residency permit for high-skilled finance professionals. Taiwan has set up an entire government department, the Taiwan-Hong Kong Services and Exchange Office, to facilitate relocations from Hong Kong. Meanwhile in the United States, the Hong Kong Safe Harbor Act—which would grant refugee status to Hong Kongers threatened by the new security law—has strong bipartisan support in Congress.
Most of these countries officially emphasize the humanitarian character of their outreach efforts, but the reality is that they are also eying Hong Kong's extraordinary concentration of human capital. After all, 1.4 billion people in mainland China are also subject to the tyranny of arbitrary laws under the Chinese party-state, but no one is scrambling to offer them a new home. Hong Kong is different: It is most famous as a financial hub, but it is also a major center for consulting, design, education, fashion, merchandising, publishing, and a range of other professional services. These are undertaken by both locals and expats, and nearly all of them are mobile. Most of them speak English.
Many of today's native Hong Kongers are descended from people who fled Communist Party rule in China at the end of the civil war in 1949. Others fled during the Cultural Revolution. More recent arrivals from mainland China include roughly 1 million immigrants who have been allowed into what's now called the Hong Kong Special Administrative Region (which maintains its own passports and immigration controls) through a program that approves up to 150 people a day to be reunited with relatives.
And then there are the immigrants from around the globe, for whom Hong Kong is a magnet. As of the latest census in 2016, Hong Kong's population of 7.3 million included 570,000 non-Chinese immigrants. The largest groups are from the Philippines (190,000) and Indonesia (160,000), many of them domestic workers. But that still leaves some 200,000 who are mostly footloose professionals, including 35,000 British, 15,000 Americans, 15,000 Australians, and 11,000 Japanese. Other figures based on immigration data put the numbers even higher.
Both natives and foreign-born residents are equally subject to the new national security law, which creates new penalties for secession, subversion, terrorism, and "collusion with a foreign country or with external elements." Other countries also outlaw secession, subversion, and terrorism, but China notoriously construes these crimes extraordinarily broadly. Even worse for Hong Kong, the new security law's provisions on collusion are broader still: People who advocate international sanctions on China or "provoke hatred" toward China can now receive sentences ranging from three years to life imprisonment.
What's more, China claims global jurisdiction for these supposed crimes. That means, for example, that a human rights activist based in the United States or elsewhere who calls for sanctions against China for its internment of minority Uighurs in concentration camps could, in principle, be arrested and tried on arrival in Hong Kong. Similarly, a foreign university that held a Hong Kong democracy conference might be unable to recruit in the city. Forget about holding a democracy debate in Hong Kong itself. Foreign professors at Hong Kong universities will have to be especially wary.
Of course, everything that now applies to Hong Kong has always applied on the mainland. But the prohibition on criticizing China was always tacit. In Hong Kong, it is now explicit. It seems unlikely that Hong Kong Chief Executive Carrie Lam, or even Beijing's new man in Hong Kong, Zheng Yanxiong (whose mouthful of a title is "director of the Office for Safeguarding National Security of the Central People's Government in the Hong Kong Special Administrative Region"), will start having expats arrested for anti-China tweets anytime soon. But you never know. Hong Kong has always taken special pride in being governed by the rule of law, and now the law says that an errant tweet carries a minimum three-year prison sentence. Who will want to take that chance?
Native-born Hong Kongers, longtime expats, and professional services companies all have strong incentives to leave. Only the big banks have to stay if they want to continue to do business in China, including their lucrative role in handling all manner of capital flows in and out of the world's second-largest economy. Many have criticized banks like HSBC and Standard Chartered for publicly endorsing the new Hong Kong security law. No doubt they came under strong pressure to do so, and no doubt their acquiescence is a sign that they have no intention of abandoning the city. But the continuing competitiveness of Hong Kong as a business and financial center depends on the decisions of thousands of smaller firms, their owners, and their employees. Having greater opportunities to relocate, they may be less willing than the banks and bankers to kowtow to their new emperor, Chinese President Xi Jinping.
For although China may not value "troublesome" Hong Kongers, much of the rest of the world does. Both Hong Kong natives and longtime foreign residents have skills and connections that are welcome almost everywhere. The locals have emigration options that span the Asia-Pacific region and the English-speaking world. In theory, China could make it difficult for them to leave, but in practice, that seems unlikely. Just as damaging for Hong Kong, the expats can follow the locals out of the territory—or just go home. Hong Kong itself will always remain firmly under Beijing's control. But to paraphrase Princess Leia of Star Wars fame, the more Beijing tightens its grip, the more Hong Kongers will slip through its fingers.
Salvatore Babones is an adjunct scholar at the Centre for Independent Studies in Sydney and an associate professor at the University of Sydney. Twitter: @sbabones
Disclaimer: This article first appeared on foreignpolicy.com, and is published by special syndication arrangement.